Investors watched Wednesday as negative headlines and sentiment kicked down shares of some Silicon Valley heavyweights and wiped away billions of dollars in market cap.
Part of the drag came from continued fallout over Facebook’s data scandal.
“There is a reckoning coming about data transparency and the authorization that users give for their data” across the board, said Quartz’s David Yanofsky.
Overall, the NYSE’s FANG+ index, which is comprised of names such as Facebook, Amazon, Apple, Netflix and Google parent Alphabet, slipped more than 2 percent. Here’s a round-up of what’s going on:
The social media giant hasn’t been able to shake off the Cambridge Analytica news yet, with each day bringing new details to light that swipe at the company’s reputation.
On Wednesday, after days of intense pressure, the company announced a redesigned interface, making its privacy policies and terms of services more accessible and giving users some measure of control.
Although, as Damon Beres, Executive Editor at Mashable, pointed out, Facebook “didn’t introduce any new privacy controls.”
Up until now, the company has warned users about how their data may be used with the same level of opacity as cigarette companies, said Yanofsky.
“[Currently] when you click that button to give access to my profile, give access to my posts, it’s not always clear how much farther it goes and what that data will actually be used for.”
He goes on to say that, like other addictive products, even knowing how your information is used, may not be enough to kick the habit.
Facebook also reportedly hit pause on its latest product roll out. The company was scheduled to unveil its own Alexa-like smart speaker at its F8 developer conference in May, but is holding off because of the recent data furor.
All of that came on the back of news that CEO Mark Zuckerberg is preparing to testify before Congress next month.
Since the scandal broke less than two weeks ago, the company’s market cap has been slashed by nearly $100 billion.
Early Wednesday, reports emerged that President Trump is “obsessed” with Amazon and wants to go after the tech giant for impacting small businesses.
The president reportedly floated the idea of changing the e-commerce giant’s tax treatment or using anti-trust laws against it, according to Axios.
Even the hint of a clash with the White House was enough to worry investors. Amazon shares sank by more than 4 percent, at one point erasing $53 billion in market value from the company.
This turn of events raised the question of whether Amazon would reconsider putting its second headquarters in Washington DC, considered by many to be a front-runner for the highly-anticipated HQ2.
But Alayna Treene, Associate News Editor at Axios, doesn’t think Amazon’s relationship with Trump will impact its decision.
“I really don’t think that Amazon is going to let this hold them back,” she told Cheddar.
3. Snap Inc.
Just as Facebook tussles with the question of third party applications and how much access they have to user data, Snapchat is testing a new feature, “Connected Apps,” which would allow users to weave more apps together in the ecosystem.
Concerns that might bring up more privacy issues weighed on that stock which was down more than 1.5 percent Wednesday.
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